BLACKROCK WORLD MINING TRUST PLC

Meet the Team – Evy Hambro and Olivia Markham

The benefits of a longer-term view

The BlackRock World Mining Trust is enjoyable to manage, says co-manager Evy Hambro, who has seen it grow and improve over time.

Capital at risk. The value of investments and the income from them can fall as well as rise and is not guaranteed. The investor may not get back the amount originally invested.

Evy Hambro is a vastly experienced fund manager. Since joining the firm as a graduate in 1994, he has worked in London, Sydney and Toronto, picking up a host of skills along the way as he experienced different investment environments.

Now managing director, Evy is the Global Head of Thematic and Sector based investing and team leader for the Natural Resources team. He co-manages the BlackRock World Gold Fund, BlackRock Gold and General Fund, BlackRock World Mining Fund and is co-manager of the BlackRock Natural Resources Hedge Fund and manager of a number of segregated portfolios. Last, but by no means least, he is co-manager of the BlackRock World Mining Trust.

Experience is key

Evy is grateful for the colleagues that have helped shape his career. “Being able to learn from experienced peers in those roles has been a great help. It allowed me to learn about market conditions and the psychology that people reach for during periods of extreme volatility. “It’s something that helps to steady your nerves and grow your conviction during periods of stress. Learning from others is something that every investor needs to do when they start.”

When it comes to periods of stress, Evy says that investing in a cyclical sector such as mining means that he’s often dealing with challenging investment environments. “The last such period followed the 2000-2011 commodity super cycle, as fears around China’s growth and the debt levels of some of the miners led the sector lower,” he says.

However, the rebound of the sector from its lowest point in January 2016 created exciting investment opportunities as the companies began to reduce their debt and commodity prices rallied.

Counter-cyclical investing

On the upside, he cites the 2013 decision to invest in a royalty with a copper mining company in Brazil as one of the most satisfying decisions the Trust has taken. “It was done on the back of a combination of counter-cyclical investing i.e. investing in stocks whose prices move in opposition to the overall business cycle, as well as on-the-ground research in Brazil,” he explains. In return for a USD$12m investment, the BlackRock World Mining Trust receives a 25% royalty payment on gold revenues and a 2% royalty payment on revenues from other metals produced at the company’s Antas North and Pedra Branca licenses.

“There are so many things about the Trust that make it really enjoyable to manage,” he says, “such as the closed-end structure that allows you to be more patient with your investments. It has more tools at its disposal than open-ended funds, while reporting to the Board (and shareholders) makes the experience much more real.”

Overseeing growth

Evy says that aside from his family, his main interest outside work is the time he puts into helping run the farm he lives on. “It has a range of different parts to it and as such there is a never-ending amount of work to do,” he says.

On the farm, his work includes river restoration, ecological enhancement, property refurbishment and general farming and – just as with the Trust – seeing it grow and improve over time gives him huge satisfaction.

Evy Hambro and Olivia Markham

With mining it’s a marathon, not a sprint

A deep understanding of the market and its cyclical nature is crucial, says Olivia Markham, co-manager of the BlackRock World Mining Trust.

The cyclical nature of the mining sector means that investors should regard it more as a marathon than a sprint. So, it’s quite fitting that BlackRock World Mining Trust co-manager Olivia Markham has taken up long-distance running. “I find it helps my sanity,” she jokes.

Olivia, a chartered financial analyst, is a key member of the Natural Resources Team. She is responsible for coverage of the gold and mining sectors and says that the flexibility within the investment trust structure makes it an enjoyable portfolio to run.

“We have the ability to tactically use gearing – borrow to invest – to increase or decrease our exposure to the sector when warranted, while the closed-end nature of the fund has allowed us to invest in and grow exposure to a number of small-cap holdings, which has been a success.

“We’re also able to invest in all areas of a company’s capital structure, including equity, debt and private investments, and we have created royalties over a company’s assets. In addition, we can use option strategies (i.e. investments whose prices are based on one or more underlying assets) to generate additional income for the Trust’s shareholders, which helps to mitigate the volatility levels.”

Industry experience

Along with a wealth of investment experience, Olivia brings industry experience to the Trust, having spent four years working with the mergers and acquisition team at BHP Billiton. Having been involved in the sector for 15 years she has learned just how important the macro-economic environment is for its performance. “For anyone looking to build a career in investing, I would encourage them to develop a deep understanding of the broader market as it often overrides stock-specific catalysts and valuation,” she says.

It’s that kind of insight that led to the Fund backing some mining companies focused on reducing debt over the past three years. “It has proved very satisfying,” says OIivia, “as has an equity and royalty investment in a Brazilian copper mining company.”

Opportunities exist

So, while the mining sector often results in a challenging environment when it comes to investment, it’s clearly not without opportunities. Olivia also gives an example from the last downturn in 2014/15 when the team was able to deploy ‘meaningful risk’ at the bottom of the cycle, which later paid off, even to the extent that she says: “Looking back we could have been even more aggressive, but that’s always easy to say with hindsight.”

And when Olivia isn’t monitoring the mining sector, she tries to keep a good balance between spending time with friends and family and keeping fit and healthy – giving her the crucial stamina required to keep up with such a dynamic sector.

The opinions expressed are as of September 2019 from BlackRock and are subject to change at any time due to changes in market or economic conditions.

Risk Warnings

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Trust specific risks

Exchange rate risk: The return of your investment may increase or decrease as a result of currency fluctuations.

Emerging markets: Emerging market investments are usually associated with higher investment risk than developed market investments. Therefore, the value of these investments may be unpredictable and subject to greater variation.

Gold/mining: Mining shares typically experience above average volatility when compared to other investments. Trends which occur within the general equity market may not be mirrored within mining securities

Gearing risk: Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.

Important Information:

Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: +44 (0)20 7743 3000. Registered in England and Wales No. 2020394. For your protection, telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited.

When this document is issued in the EEA, it is issued by BlackRock (Netherlands) B.V.: Amstelplein 1, 1096 HA, Amsterdam, Tel: 020 – 549 5200, Trade Register No. 17068311. For more information, please see the website: www.blackrock.com. For your protection, telephone calls are usually recorded. BlackRock is a trading name of BlackRock (Netherlands) B.V

The Company is managed by BlackRock Fund Managers Limited (BFM) as the AIFM. BFM has delegated certain investment management and other ancillary services to BlackRock Investment Management (UK) Limited. The Company’s shares are traded on the London Stock Exchange and dealing may only be through a member of the Exchange. The Company will not invest more than 15% of its gross assets in other listed investment trusts. SEDOL™ is a trademark of the London Stock Exchange plc and is used under licence.

Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance.

The BlackRock World Mining Trust plc currently conducts its affairs so that its securities can be recommended by IFAs to ordinary retail investors in accordance with the Financial Conduct Authority’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The securities are excluded from the Financial Conduct Authority’s restrictions which apply to non-mainstream investment products because they are shares in an investment trust.

BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. To ensure you understand whether our product is suitable, please read the fund specific risks in the Key Investor Document (KID) which gives more information about the risk profile of the investment. The KID and other documentation are available on the relevant product pages at www.blackrock.co.uk/its. We recommend you seek independent professional advice prior to investing.

Any research in this material has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This material is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

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